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The G20's sticking plaster approach falls well short of the major surgery that is needed to tackle the global food price crisis said Oxfam at the close of the Agriculture Ministers Meeting in Paris today.

The World Bank estimates that 44 million people fell below the poverty line in the second half of 2010 due to high and volatile prices and research for Oxfam's GROW campaign indicates that the price of staple foods such as maize could more than double in the next 20 years - up to half of this increase is due to climate change.

Jean-Cyril Dagorn, policy advisor for Oxfam's GROW campaign said:

"Putting the global food price crisis at the top of the G20's political agenda was a welcome move but high expectations that politicians were finally starting to take the global food price crisis seriously were crushed in Paris."

"Fixing the global food system and ending the food price crisis requires major surgery yet the G20 produced little more than a sticking plaster. Agriculture Ministers agreed to address some of the impacts of high and volatile prices but failed to introduce the measures needed to prevent prices spiralling out of control in the first place."

"Crossing our fingers and hoping the crisis will go away is simply not good enough when millions of people are going hungry because of high and volatile food prices. Only by getting to grips with the problems - reforming flawed biofuels policies which divert food into fuel and helping poor countries build up buffer stocks to cope with extremes in food price volatility – will they solve this problem."

"This is not the end of the road. G20 Finance Ministers could still get to grips with excessive speculation when they meet in July, the G20 Heads of State still have an opportunity to match bold rhetoric with bold action when they meet in November, and the Committee on Food Security – the only truly global body responsible for tackling hunger - meets in October. Governments must seize these opportunities to end the global food price crisis."

Oxfam's GROW campaign is calling for action to ensure everyone always has enough to eat.

Analysis of the G20 Communiqué

Biofuels: Verdict – Poor There were high hopes that Ministers would tackle flawed biofuels policies after calls for action by the Food and Agriculture Organisation, World Bank, International Monetary Fund and others. However, while Ministers agreed to look at the links between biofuels production and food price volatility they failed to take any concrete measures aimed at reforming biofuels policies or adjusting biofuels targets when food supplies are endangered. Countries suspected of blocking progress include the US, Brazil, Canada and France. The US Government’s biofuels laws meant nearly 40 per cent of US corn crop went into ethanol production rather than food production in 2010 - as the second food price crisis in the space of 3 years began to hit.

Food reserves: Verdict – PoorAgriculture Ministers agreed to look into bolstering emergency reserves which provide food to people in crisis situations. This is a small step forward however this approach only deals with some of the impacts of high and volatile prices and fails to address the causes. G20 Ministers failed to recognise that strategic food reserves or buffer stocks also have a critical role to play in helping poor countries cope with extremes food price volatility. A global grain reserve of just 105m tonnes would have been enough to help avoid the food price crisis in 2007-8. The cost of maintaining this would have been $1.5 billion or just $10 for each of the extra 150 million people who joined the ranks of the hungry as a direct result of the last food price surge.

Speculation: Verdict – Inconclusive This is the top priority for the French Presidency. The G20 Agriculture Ministers agreed to explore the links between speculation and food price volatility and to look at mechanisms for regulating excessive speculation on the commodity markets. This is an issue which Finance Ministers will take up when they meet in July.

Transparency: Verdict – Pass Agriculture Ministers agreed to set up system to provide information on agricultural production and food stocks held by countries around the world. This will help ensure countries and the international community has some of the information they need to analyse the global food situation and take action to avert a crisis. Unfortunately Ministers stopped short of requiring agribusinesses – which dominate the trade in many staple foods– to disclose information on the stocks they hold. According to one estimate Cargill, Bunge, and ADM control nearly 90 per cent of global grain trading between them.

Insurance Mechanisms: Verdict - Poor France pushed forward market based proposals for hedging instruments that would enable vulnerable countries to insure themselves against future food price shocks. Because the proposals fail to address the causes of price volatility they are unlikely to succeed. Without action to regulate and increase the transparency of global commodity and futures markets the measures are more likely to benefit the financial institutions which provide the insurance rather than poor food insecure countries which are purchasing it. In addition, poor smallholders who will not be able to access these mechanisms. Oxfam believes resources would be better directed at other instruments to manage risk such as buffer stocks.

Investment in agriculture: Verdict – FailAgriculture Ministers agreed that more investment is needed in agriculture. However, they focused on the need to support private investment in agriculture, rather than agreeing any concrete measures to support poor producers in developing countries who offer the greatest potential to sustainably increase global agricultural yields and tackle hunger. Investing in women farmers could raise total agricultural output in developing countries by 2.5 to 4 per cent.

Climate change: Verdict - FailRich counties failed to even acknowledge that climate change is major cause of food price volatility. Climate change is estimated to have increased the amount we spend on food worldwide by $50bn a year.

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